However, AIIA Chief Executive Officer, Ian Birks, said there was a lack of focus on business stimulus across the digital economy, particularly in the context of other key goals outlined in this Budget.

“The digital economy needs to be recognised for the economic contribution it makes in its own right. This is particularly important given ICT’s status as horizontal industry that will underpin many of the government’s aspirations across the wider economy – such as healthcare reform, the education revolution and emissions control,” Mr Birks said.

“Business stimulus across the ICT industry is very important. An innovative and thriving ICT sector will be essential to meeting the future challenges identified by the Rudd Government.”

In particular, AIIA said it was disappointed that the Commercial Ready program has been cut, preempting any consideration currently being given to this sector of the industry through the Review of the National Innovation System headed by Dr Terry Cutler.

“Commercial Ready had proven to be a very successful stimulus for SME growth in the ICT sector, and a mainstay of emerging product-based ICT companies. We hope that an alternative to Commercial Ready will be implemented, and press the Rudd Government to support the industry through an interim scheme until the results of the Cutler Review are delivered,” Mr Birks said.

“SME innovation and growth is a critical component of Australia’s aspirations in the information economy. Technology innovation is now recognised as a major driver of productivity growth in the Australian economy, and we cannot afford to fall behind in these areas,” continued Mr Birks.

A response to the Cutler Review White Paper is not due to be tabled in Parliament until November this year. No new programs announced in the Federal Budget replace the functions fulfilled by the Commercial Ready program.

In other areas, this Budget has recognised ICT’s role as an essential ingredient in building a services based economy in Australia, for example through the inclusion of Broadband in the Building Australia Fund. AIIA welcomes this recognition.

The Digital Education Revolution policy is a significant step towards creating essential skills in Australia’s future. Embedding technology skills across all subjects at the beginning of a student’s educational journey is important recognition of ICT’s role in the future of Australia, and without a workforce skilled in these areas Australia will not be able to drive innovation.

“The industry welcomes these initiatives with enthusiasm, and needs to be supplied with detailed information about the timetable for rollout and specific expenditure as soon as possible,” said Mr Birks.

The 2008 Federal Budget has also reduced software depreciation from write-off over 2 ½  years to 4 years. This reverses the decision made in the 2007 Federal Budget, which increased the rate from 4 to 2 ½ years (a decision which brought software and hardware depreciation rates into line.)

According to Ian Birks, the 2 ½ year rate is a more meaningful reflection of the lifespan of software. A faster rate of depreciation would be the preference of the industry, encouraging more effective use of assets. 

"There are many factors that drive business considerations for software purchasing," Mr Birks said.  "On its own, the revised depreciation rate is unlikely to significantly slow the rate of software purchasing by business. Nevertheless, it is a disappointing outcome for the industry. Software is clearly a major driver of productivity – that there would be any penalisation of an industry that is driving productivity and innovation across all sectors seems inconsistent, given the current national emphasis on innovation and productivity."

Also announced in this Budget were plans to raise skilled migrant intakes by 30 percent to record levels in a bid to overcome a shortage of skilled workers.  This equates to an extra 31,000 skilled migrants permanently entering Australia in 2008-2009. AIIA welcomes measures that will assist to address skills shortages across the ICT industry.

AIIA is also waiting for detail on what percentage of the $44 million earmarked for the establishment of the National Emissions Trading Scheme will be set aside for ICT infrastructure.

“As with so many of our key national challenges, the ICT industry is at the forefront of new environmental technologies, providing opportunities to develop energy efficient products and services that help minimise Australia’s environmental footprint.  At the same time, ICT is underpinning innovation that is assisting other sectors become more environmentally sustainable,” said Mr Birks.

This year, for the first time, the iAwards will be held in Melbourne.

Victoria is home to almost one-third of Australia’s ICT companies, employing nearly 76,500 people or 30 per cent of Australia’s ICT workforce. 

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“The inspiration and motivation for ReadOn was to address the needs of our daughter Hannah who, at the age of seven, was diagnosed with dyslexia,” says Phil Mangano, Founder of ReadOn.

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